Alibaba Facing Heat in US Over Fake Goods

Asian eTailer and investor Alibaba may get blacklisted in the American market as a clothing trade group has filed a complaint against Alibaba, alleging that the eCommerce giant has tolerated the sale of counterfeit and pirated goods on its Taobao platform.

The American Apparel and Footwear Association (AAFA) has asked the Office of the US Trade Representative and the Securities and Exchange Commission to add Taobao to the Notorious Market list.

Taobao owned by Alibaba, was removed from blacklist and allowed to trade in U.S by the Trade Representative and the Securities and Exchange Commission in 2012.

AAFA represents more than 1,000 brands in the US, and has noted that the significant presence of counterfeit products on Taobao has resulted in millions of dollars of lost sales, reputational damage, legal costs and “exhaustion of internal resources” in the US apparel and footwear industry, according to Thaivisa.

Last year, Alibaba had removed over 90 million products from its platforms citing counterfeits. The company had also stated that it has invested over $160M in steps to block counterfeit products and boost consumer protection. However, the inclusion in notorious list would only mean tough times again for the eRetailer.